Chapter 1
Federal Mortgage Laws and Consumer Protection Regulations
Course: Safe Mlo Prep
Subject: Safe Mlo Prep
Chapter: Ethics
OVERVIEW
MLOs and their institutions have legal obligations under the Bank Secrecy Act to identify, document, and report suspicious financial activity. Understanding when and how to file a Suspicious Activity Report (SAR) — and the strict prohibitions surrounding it — is essential knowledge for every MLO.
- The Bank Secrecy Act (BSA) and AML Obligations
The Bank Secrecy Act requires financial institutions — including mortgage companies — to maintain Anti-Money Laundering (AML) compliance programs that include:
- Written AML policies and procedures
- A designated AML compliance officer
- Ongoing employee training on AML obligations and red flags
- Independent testing and auditing of the AML program
- Filing of required reports — SARs and CTRs
- Suspicious Activity Reports (SAR)
When to file: A SAR must be filed when: